COMPANY INFORMATION...Brig Aamir Hussain Mirza, SI(M), (Retd) CHIEF FINANCIAL OFFICER Mr. Muhammad...

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COMPANY INFORMATION

DIRECTORS

Mr Waqar Ahmed Malik Chairman

Mr. Sarfaraz Ahmed Rehman Chief Executive & Managing Director

Lt Gen Tariq Khan, HI(M), (Retd)

Dr. Nadeem Inayat

Mr Imran Moid

Mr Qamar Haris Manzoor

Mr Mohammad Munir Malik

Mr Rehan Ahmed

Syed Khalid Siraj Subhani

Mr Moeez ur Rehman

Ms Pouruchisty Sidhwa

Ms Saira Nasir

COMPANY SECRETARY Brig Aamir Hussain Mirza, SI(M), (Retd)

CHIEF FINANCIAL OFFICER Mr. Muhammad Javed Akhtar

REGISTERED OFFICE FFBL Tower, C1 / C2, Sector B, Jinnah Boulevard, Phase II, DHA Islamabad. Tel: +92 51 8763325, Fax: +92 51 8763304-05 E-mail: [email protected]

PLANTSITE Plot No. EZ/I/P-1 Eastern Zone, Port Qasim, Karachi 75020. Tel: +92 21 34724500-29, Fax : +92 21 34750704 Email: [email protected]

WEB PRESENCE www.ffbl.com

LEGAL ADVISORS

Orr Dignam & Co,Advocates Marina Heights,2nd floor, 109 East, Jinnah Avenue, Blue Area, Islamabad, Pakistan Tel: (051) 2348645-9

AUDITORS

EY Ford Rhodes,Eagle Plaza, 75 West,Fazal-e-Haq Road,Blue Area, Islamabad .

SHARES REGISTRAR

M/s Corplink (Pvt) Limited, Wings Arcade, 1-K, Commercial, Model Town, Lahore.Tel: (042) 35839182, 35916719 Fax: (042) 35869037

BANKERS

Habib Bank Limited

MCB Bank Limited

United Bank Limited

National Bank of Pakistan

Allied Bank Limited

Askari Bank Limited

Faysal Bank Limited

Standard Chartered Bank (Pakistan) Limited

Habib Metropolitan Bank Limited

The First Micro Finance Bank Limited

Soneri Bank Limited

Summit Bank Limited

JS Bank Limited

Samba Bank Limited

Zarai Taraqiati Bank Limited

Industrial Bank of China

The Bank of Khyber

Al-Baraka Bank (Pakistan) Limited

Dubai Islamic Bank Pakistan Limited

Bank Islami Pakistan Limited

Meezan Bank Limited

MCB Islamic Bank Limited

Bank Al-Falah Limited

Bank Al-Habib Limited

Silk Bank Limited

The Bank of Punjab

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DIRECTORS’ REVIEWFOR THE PERIOD ENDED SEPTEMBER 30, 2020

The Board of Directors is pleased to present a brief overview of the operational and financial performance of the Company for the period ended September 30, 2020.

The outbreak of COVID-19 coupled with locust attacks created extraordinary challenges for agriculture sector of the economy of Pakistan. Implementation of lockdown by the government in March 2020 disrupted fertilizer supply chain in the country. Subsequently, COVID-19 cases have dropped considerably in recent months, prompting the government to generally lift the lockdown and hence the business environment has improved.

By the grace of Almighty, overall performance of the plants remained satisfactory. Production remained in line with capacity and extra Urea production balanced out lower DAP, compared to corresponding period of last year. Ammonia was used for production of Urea, instead of DAP, in order to manage higher opening inventory of DAP.

Financial results

Third quarter 2020 witnessed improved performance by the Company. Sales and gross profit increased significantly versus 2019 primarily on account of increase in volumes and significant reduction in operating as well as finance costs. Consequently, the Company booked a profit after tax of Rs. 3,306 million in the third quarter 2020 versus a loss of Rs. 467 million in the corresponding period of 2019, an improvement of Rs.3,773 million.

The Company also showed improved performance for the nine-month period to September 30, 2020 by achieving higher sales volume and reducing costs, resulting in higher gross profit of Rs. 5,320 million as against Rs. 3,570 million during the same period 2019. Profit after tax and before impairment stood at Rs. 321 million versus loss of Rs 2,418 million in the corresponding period, which did not have impairment. However, during the nine-month period of 2020, provision for impairment loss on investment in FML of Rs. 1,222 million and provision of input sales tax disallowance on sales to unregistered persons of Rs. 604 million negatively impacted the results. Loss after tax stood at Rs. 901 million (LPS Rs. 0.97) on September 30, 2020 against loss of Rs. 2,418 million (LPS Rs. 2.59) in the corresponding period of 2019.

Our subsidiaries have also shown better results during the period. Operational results of FFL improved, returning to post a gross profit of 2.4% in third quarter 2020 against a gross loss of 9.8% in 2019, amid a sales growth of 39% in third quarter. FPCL profits also improved by 13% for the nine months period versus 2019, mainly due to lower finance cost.

The Company posted consolidated net profit of Rs. 24 million as against loss of Rs. 5,135 million in corresponding nine months period due to improved performance across the group.

GIDC

Supreme Court judgment dated August 13, 2020 directed all companies to pay outstanding GIDC in twenty-four equal monthly instalments. The company has filed review petition before the Supreme Court against the said judgment. FFBL has also obtained a stay order from Sindh High Court with respect to the GIDC payment.

Right Issue

FFBL’s shareholders approved increase in Authorised Share Capital from Rs. 11 Billion to Rs. 15 Billion, in September 2020. In order to improve the capital structure of the Company, the Board of Directors decided to increase the Paid Up Share Capital from Rs. 9,341,100,000 to Rs. 12,912,528,570, by issue of further 357,142,857 ordinary shares of the Company of Rs. 10 each, to be offered to the shareholders of the Company in proportion to the number of shares held by each shareholder (i.e. as right shares), at a price of Rs. 14 per share (i.e. at a premium of Rs. 4 per share), in the ratio of 38.2335 right shares for every 100 existing ordinary shares of Rs. 10 each held (i.e. 38.2335%).

Future Prospects and Strategic Direction

The Company has been approached by Mari Petroleum Company Limited with a non-binding Expression of Interest to explore the possibility of acquiring FFBL`s shareholding in Foundation Wind Energy-I and Foundation Wind Energy-II, subject to due diligence and related approvals. The Board has taken an in-principle decision to enter into discussions with potential acquirers to explore the possibility of divesting FFBL`s shareholding in the said investments.

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This is the agreed direction which the Company has taken, to explore the possibility of divesting some of the non-core businesses, to release the pressure on the core business and also to improve the liquidity of the Company. This extra liquidity can then be diverted to the benefit of core activity to drive an efficient and profitable business.

The turnaround in quarter three has been encouraging and is the first manifestation of the above agreed strategic direction. However, the future profitability of FFBL in 2020 is still dependent upon adequate gas supply, selling price, outcome of Company’s review petition in Supreme Court on GIDC and uncertainties linked to COVID resurgence.

The Company remains in close coordination with Ministry of Petroleum, SSGCL and all other suppliers for continuous gas supplies. Going forward, FFBL expects better results for its stakeholders, through improved sales and margins for the remainder of the year.

For and on behalf of the Board

Waqar Ahmed Malik Sarfaraz Ahmed Rehman

Chairman Chief Executive & Managing Director

IslamabadOctober 27, 2020

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کیا اک یگدرکراک یلام روا یراوادیپ یک ینپمک ےئل ےک تدم یلاو ےنوہ متخ وک 2020 ربمتس 30زرٹکیرئاڈ فآ ڈروب ۔ںیہ ےہر رک سوسحم یشوخ ےئوہ ےترک شیپ هزئاج رصتخم

COVID-19 ریغ ےئل ےک ےبعش یعرز ےک تشیعم یناتسکاپ ےن ںولمح ےک لد یڈٹ ھتاس ھتاس ےک ؤلایھپ ےک یک داھک ںیم کلم ےس ذافن ےک نؤاڈ کلا ےس بناج یک تموکح ںیم 2020 چرام- ےئیدرک ادیپ زجنلیچ یلومعم ، ےہ یئوہ عقاو یمک ںایامن ںیم نیرثاتم ےک COVID-19 ںیم ںونیہم ہیلاح ، ںازا دعب ۔اوہ رثاتم ہلسلس اک یمہارف

۔ےہ یئآ یرتہب ںیم لوحام یرابوراکً اتجیتن یئوہ لباق ےک ےنرک لاحب نؤاڈ کلا یمومع تموکح ےس سج

یہر قباطم ےک شئاجنگ راوادیپ ۔یہر شخب نانیمطا یگدرکراک یعومجم یک سٹنلاپ ےس مرک و لضف ےک یلٰاعت الله ھتاس ےک راوادیپ مک یک یپ ےا یڈ راوادیپ یفاضا یک ایروی ، ںیم ےلباقم ےک ےصرع یسا ےک لاس ہتشذگ روا یک ایروی ےئاجب یک یپ ےا یڈ وک اینوما ےئلیک لامعتسا مظنم ےک یرٹنونا یفاضا یئادتبا یک یپ ےا یڈ ۔یہر نزاوتم ۔ ایگ ایک لامعتسا ےئل ےک راوادیپ جئاتن یلام روا تخورف ںیم ےلباقم ےک 2019 ۔یئآ ںیم ےنھکید یرتہب ںیم یگدرکراک یک ینپمک ںیم 2020 یہام ہس یرسیت روا ہفاضا ںیم مجح ےک تخورف یک یپ ےا یڈ روا ایروی ہجو یداینب یک سج اوہ ہفاضا ںایامن ںیم عفانم یعومجم صلاخ سکیٹزادعب اک ےپور نیلم 3،306 ںیم یہام ہس یرسیت یک 2020 ۔یھت یمک ںایامن ںیم تگلا یلام روا لنشیرپٓا یرتہب یک ےپور نیلم 3،773 ںیم عفانم ہچانچ اھت ےپور نیلم 467 ناصقن ںیم یہام ہس یسا یک 2019 ہکبج اوہ عفانم ۔یئآ

ںیم ےجیتن ےک یمک ںیم تگلا روا تخورف یفاضا ،ےئلیک ہصرع ےک هام ون ےلاو ےنوہ متخ وک 2020ربمتس30 یسا ےک 2019 ہکبج اوہ لصاح عفانم یعومجم اک ےپور نیلم 5،320ً اتجیتن ،یہر رتہب یگدرکراک یک ینپمک اہر ےپور نیلم 321 عفانم صلاخ ےلہپ ےس ٹنیمریئپما روا سکیٹ زا دعب ۔اھت ےپور نیلم 3،570 عفانم ہی ںیمےصرع ےک 2020 مہات ۔یھت ںیہن لماش ٹنیمریئپما ںیم سج اھت ےپور نیلم 2،418 ناصقن اک ےصرع یسا ےک 2019 ہکبج ڈرٹسجر ریغ روا ٹنیمریئپما یک ےپور نیلم 1،222 رپ یراک ہیامرس ںیم لیا میا فیا نارود ےک ہصرع ےک هام ون جئاتن یھب ےن ناصقن ےک ےپور نیلم 604 رپ ےنلم ہن تزجا یک ےنرک اہنم وک سکیٹ زلیس ٹپ نا رپ تخورف وک دارفا )ےپور 0.97 ناصقن صصح یف( ےپور نیلم 901 هراسخ صلاخ سکیٹ زا دعب وک 2020 ربمتس 30 ۔ لااڈ رثا یفنم رپ ۔اھت )ےپور 2.59 ناصقن صصح یف( ےپور نیلم 2،418 ناصقن یہی ںیم ےصرع یسا ےک لاس ہتشزگ ہکبج اہر ،یئآ یرتہب ںیم جئاتن لنشیرپآےک لیا فیا فیا ۔ایک هرہاظم اک جئاتن رتہب نارود ےک تدم سا یھب ےنزیریڈیسبس یرامہ

عفانم یعومجم اک دصیف 2.40 ھتاس ےک ہفاضا دصیف 39 ںیم تخورف ںیم یہام ہس یرسیت یک 2020 ثعابےک سج هام ون ےک لیا یس یپ فیا ںیم 2020 ۔ اھت دصیف 9.8 ناصقن یعومجم ںیم ےصرع یسا ےک 2019 ہکبجاوہ لصاح ۔ےہ تگلا یلام مک ہجو یداینب یک سج یئآ یرتہب دصیف 13 ںیم ےلباقم ےک ہصرع یسا ےک 2019 ںیم عفانم ےک ےپور نیلم 5،135 ےک ےصرع ےک هام ونےک لاس ہتشزگ ےن ینپمک ےس ہجو یک یگدرکراکرتہب یک پورگ ےروپ ۔ ایک لصاح عفانم صلاخ اک ےپور نیلم 24 ںیم ےلباقم ےک ناصقن ےک

یس یڈ یئآ یج ہناہام سیبوچ تاج ایاقب ےک یس یڈ یئآ یج وک ںوینپمک مامت ںیم ےلصیف ےک 2020 تسگا 13 ےک ٹروک میرپس یک یناثرظن ںیم ٹروک میرپس ےن ینپمک فلاخ ےک ےلصیف هروکذم ۔یھت یئگ یک تیادہ یک ےنرک ادا ںیم طاسقا مکح ےس ٹروک یئاہ ھدنس ںیم ےلسلس ےک یگیئادا یک یس یڈ یئآ یج ےن لیا یب فیا فیا ۔ےہ یدرک رئاد تساوخرد ۔ےہ ایلرک لصاح یھب یعانتما ارجا اک زرئیش ٹئار اھڑب ےس ےپور برا 11 وک Share Capital Authorizedںیم 2020 ربمتس ےن ناراد صصح ےک لیا یب فیا فیا فآ ڈروب ےئلیک ےنانب رتہب وک Capital Structure ےک ینپمک ۔یھت ید یروظنم یک ےن رک ےپور برا 15 رک ہعیرذ ےک ےفاضا ےک Ordinary Shares 357،142،857 ےلاو تیلام رئیش یف ےپور 10 ےک ینپمک ےن زرٹکیرئاڈ، Paid-Up Share Capital ہلصیف اک ےنرک ےپور 12،912،528،570 رک اھڑب ےس ےپور 9،341،100،000 وک ےید ےس بسانت ےک زرئیش دوجوم ساپ ےکنا وک ناراد صصح ےک ینپمک ںیم تروص یک زرئیش ٹئار زرئیش ہی ۔ایک رپ زرئیش 100 رہ ےک تیلام ےپور 10 وج ےہ )میمیرپ ےپور 4( ےپور 14 تمیق رئیش یف یکنج،ےگ ںیئاج

۔)ےہ دصیف 38.2335 ہک وج( ےگ ںیئاج ےید ےس بسانت ےک زرئیش ٹئار 38.2335

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CONDENSED INTERIM STATEMENT OF FINANCIAL POSITIONAS AT SEPTEMBER 30, 2020

September 30, December 31,

2020 2019

(Un - audited) (Audited)

Note (Rupees '000)

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Share capital 5 9,341,100 9,341,100

Capital reserve 228,350 228,350

Revenue reserve

Accumulated loss (3,636,939) (2,735,489)

5,932,511 6,833,961

NON-CURRENT LIABILITIES

Long-term loans 6 10,889,587 13,791,667

Deferred liabilities 7 1,414,004 1,578,651

12,303,591 15,370,318

CURRENT LIABILITIES

Trade and other payables 41,245,948 34,993,385

Advances from customers 1,100,724 83,309

Unpaid dividend 10,954 10,954

Unclaimed dividend 117,110 118,640

Accrued interest 571,193 962,251

Short-term borrowings 22,210,150 28,227,084

Current portion of long-term loans 6 6,468,746 4,566,667

71,724,825 68,962,290

89,960,927 91,166,569

CONTINGENCIES AND COMMITMENTS 8

The annexed notes from 1 to 22 form an integral part of these condensed interim financial statements.

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2020 2019


Note (Rupees '000)

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 9 10,244,576 10,427,911

Long-term investments 10 27,406,358 26,179,751

Long-term loans 11 500,000 3,130,000

Long-term advances - 18,385

Long-term deposits 78,643 78,643

38,229,577 39,834,690

CURRENT ASSETS

Stores and spares 2,747,432 2,988,584

Stock-in-trade 13,678,192 14,756,054

Trade debts 5,800,919 8,606,885

Advances 739,211 923,231

Current portion of long-term loans 11 2,059,372 -

Trade deposits and short-term prepayments 137,020 132,688

Interest accrued 397,049 247,867

Other receivables 12 7,963,223 6,004,866

Income tax refundable - net 2,090,104 2,651,366

Sales tax refundable 7,620,722 8,716,968

Short-term investments 13 - 1,009,029

Cash and bank balances 8,299,194 5,294,341

51,532,438 51,331,879

Non-current asset held for sale 14 198,912 -

89,960,927 91,166,569

CHAIRMAN CHIEF EXECUTIVE CHIEF FINANCIAL OFFICERDIRECTOR

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CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2020

Quarter ended September 30, Nine months ended September 30,

2020 2019 2020 2019

Note (Rupees '000) (Rupees '000)

Sales - net 15 25,180,161 22,145,957 49,961,864 43,643,456

Cost of sales 16 (21,232,127) (19,870,129) (44,641,936) (40,073,366)

Gross profit 3,948,034 2,275,828 5,319,928 3,570,090

Selling and distribution expenses (1,572,337) (1,806,332) (3,533,850) (3,696,466)

Administrative expenses (319,098) (385,031) (905,063) (1,007,641)

2,056,599 84,465 881,015 (1,134,017)

Finance costs (811,323) (1,433,177) (3,537,635) (3,558,628)

Other expenses 133,526 423,202 (1,450,542) (597,321)

1,378,802 (925,510) (4,107,162) (5,289,966)

Other income 17 2,544,363 2,054,500 4,230,339 3,985,281

Profit / (loss) before taxation 3,923,165 1,128,990 123,177 (1,304,685)

Taxation - net 18 (616,727) (1,595,752) (1,024,627) (1,113,198)

Profit / (loss) after taxation 3,306,438 (466,762) (901,450) (2,417,883)

Earning / (loss) per share - basic and diluted (Rupees) 3.54 (0.50) (0.97) (2.59)



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CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2020


2020 2019 2020 2019

(Rupees '000) (Rupees '000)

Profit / (loss) after taxation 3,306,438 (466,762) (901,450) (2,417,883)

Other comprehensive income - - - -

Total comprehensive income / (loss) 3,306,438 (466,762) (901,450) (2,417,883)



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CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2020

Share capital Capital reserve Accumulated profit / (loss)

Total

(Rupees ' 000)

Balance as at January 01, 2019 - audited 9,341,100 228,350 4,328,006 13,897,456

Total comprehensive income

Loss after taxation for the period - - (2,417,883) (2,417,883)

Other comprehensive income for the period - - - -

Total comprehensive loss for the period - - (2,417,883) (2,417,883)

Transactions with owners, recorded directly in equity

Distributions to owners

Final dividend 2018 (Re. 1 per ordinary share) - - (934,110) (934,110)

Total transactions with owners - - (934,110) (934,110)

Balance as at September 30, 2019 9,341,100 228,350 976,013 10,545,463

Balance as at January 01, 2020 - audited 9,341,100 228,350 (2,735,489) 6,833,961


Loss after taxation for the period - - (901,450) (901,450)

Other comprehensive income for the period - - - -

Total comprehensive loss for the period - - (901,450) (901,450)

Balance as at September 30, 2020 9,341,100 228,350 (3,636,939) 5,932,511



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CONDENSED INTERIM STATEMENT OF CASH FLOWS (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2020

2020 2019

Note (Rupees '000)

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from / (used in) operating activities 19 12,590,985 (11,599,568)

Income tax paid (649,550) (961,616)

Finance costs paid (3,928,693) (2,865,280)

Payment to gratuity fund (57,797) (77,059)

Compensated absences paid (33,718) (26,224)

Payment to Workers' (Profit) Participation Fund - (10,954)

Net cash generated from / (used in) operating activities 7,921,227 (15,540,701)

CASH FLOWS FROM INVESTING ACTIVITIES

Fixed capital expenditures (522,400) (1,782,834)

Long-term investment 131,707 -

Long-term advances 18,385 87,552

Sale proceeds from disposal of property, plant and equipment 69,469 45,756

Dividend received 3,075,710 3,120,071

Short-term investments 9,212 5,406,893

Long-term loans disbursed (2,059,372) (2,850,000)

Profit received on bank balances, term deposits and sub-ordinated loans 379,380 544,122

Net cash generated from investing activities 1,102,091 4,571,560

CASH FLOWS FROM FINANCING ACTIVITIES

Long-term financing receipt 2,450,000 4,275,000

Long-term financing payment (3,450,001) (4,500,000)

Short-term borrowings - net (4,998,006) 4,500,000

Dividend paid (1,530) (932,487)

Net cash (used in) / generated from financing activities (5,999,537) 3,342,513

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 3,023,781 (7,626,628)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD (8,982,750) 366,092

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD (5,958,969) (7,260,536)

CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the condensed interim statement of cash flows comprise the following condensed interim statement of financial position amounts:

- Cash and bank balances 8,299,194 6,649,821

- Short-term highly liquid investments - 1,600,000

- Short-term running finance (14,258,163) (15,510,357)

(5,958,969) (7,260,536)



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NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2020

1 THE COMPANY AND ITS OPERATIONS

Fauji Fertilizer Bin Qasim Limited (“the Company”) is a public limited company incorporated in Pakistan under the Companies Ordinance,1984 (now replaced by the Companies Act, 2017 with effect from May 31, 2017). The shares of the Company are quoted on the Pakistan Stock Exchange. The registered office of the Company is situated at FFBL Tower, C1/C2, Sector B, Jinnah Boulevard, DHA II, Islamabad. The principal objective of the Company is manufacturing, purchasing and marketing of fertilizers. The Company commenced its commercial production on January 1, 2000.

2 BASIS OF PREPARATION

These condensed interim financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable in Pakistan for interim financial reporting comprise of:

- International Accounting Standard (lAS) 34, Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, 2017; and

- Provisions of and directives issued under the Companies Act, 2017.

Where the provisions of and directives issued under the Companies Act, 2017 differ with the requirements of lAS 34, the provisions of and directives issued under the Companies Act, 2017 have been followed.

The disclosures in these condensed interim financial statements do not include the information reported for complete annual financial statements and should therefore be read in conjunction with the financial statements for the year ended December 31, 2019. The comparative Statement of Financial Position is extracted from the annual financial statements, as of December 31, 2019, whereas the Statement of Profit or Loss, the Statement of Comprehensive Income, the Statement of Cash Flows and the Statement of Changes in Equity are extracted from the un-audited condensed interim financial statements, for the period ended September 30, 2019.

These condensed interim financial statements are unaudited and are being submitted to the members, as required under Section 237 of the Companies Act, 2017, and the Listed Companies (Code of Corporate Governance) Regulations, 2019. The condensed interim consolidated financial statements of the Company are prepared separately.

In these condensed interim financial statements, the investments in subsidiaries and associates are accounted for on the basis of direct equity interest at cost, rather than on the basis of reported results.

3 ACCOUNTING POLICIES

The accounting policies and methods of computation adopted for the preparation of these condensed interim financial statements are similar to those applied in the preparation of the financial statements for the preceding year, ended December 31, 2019.

4 IMPACT OF COVID-19

On January 31, 2020, the World Health Organization (WHO) announced a global health emergency due to Corona virus. Because of the rapid increase in exposure globally, on March 11, 2020, the WHO classified the COVID-19 outbreak as a pandemic.

The Government of Pakistan imposed restrictions on movement temporarily. The Company has adopted the required regulations. The plant operations remained broadly unaffected and there has been no significant effect on sales. Accordingly, till date there has been no effects on Company’s financial as well as operational results. Management is also not expecting any significant disruptions in the future. Management of the Company, however, continue to evaluate it’s effect till the date of authorization of these financial statements for current and next year.

5 SHARE CAPITAL

5.1 Pursuant to Extraordinary General Meeting held on September 09, 2020, the authorized share capital of the Company has been increased from Rs. 11,000,000,000 (1,100,000,000 shares of Rs. 10 each) to Rs. 15,000,000,000 (1,500,000,000 shares of Rs. 10 each).

5 .2 The status of significant shareholdings, as at September 30, 2020, are given below:

No. of Shares Percentage (%)

Fauji Fertilizer Company Limited 465,891,896 49.88

Fauji Foundation 170,842,386 18.29


13

10 LONG-TERM INVESTMENTS

Joint venture 10.1 1,411,150 1,411,150

Associated companies 10.2 7,691,556 7,991,556

Subsidiary companies 10.3 18,303,652 16,777,045

Other long-term investments 10.4 - -

27,406,358 26,179,751


2020 2019


Note (Rupees '000)

6 LONG-TERM LOANS

Loans from banking companies-secured 17,358,333 18,358,334

Less: Current portion shown under current liabilities 6,468,746 4,566,667

10,889,587 13,791,667

7 DEFERRED LIABILITIES

Compensated leave absences 578,276 556,737

Deferred taxation 7.1 835,728 1,021,914

1,414,004 1,578,651

7.1 The balance of deferred tax is in respect of the following taxable / (deductible) temporary differences:

Accelerated tax depreciation 1,523,045 1,511,560

Provision for inventory obsolescence (52,276) (38,003)

Allowance of expected credit loss against other receivables (57,116) (57,116)

Unabsorbed depreciation (577,925) (394,527)

835,728 1,021,914

8 CONTINGENCIES AND COMMITMENTS

Contingencies

i) Guarantees issued by banks on behalf of the Company 59,409 53,409

Commitments

i) Capital expenditure - contracted 217,392 400,541

ii) Letters of credit for purchase of stores, spares and raw materials 1,149,705 763,244

9 PROPERTY, PLANT AND EQUIPMENT

Opening written down value 10,427,911 9,747,537

Additions during the period / year 522,400 2,359,566

Cost of disposals during the period / year (425,756) (122,592)

Depreciation charged during the period / year (694,273) (1,667,495)

Accumulated depreciation on disposals during the period / year 414,294 110,895

10,244,576 10,427,911


14


2020 2019


Note (Rupees '000)

10.1 Investment in joint venture - at cost

Pakistan Maroc Phosphore S.A, Morocco 1,411,150 1,411,150

10.2 Investments in associates - at cost

Quoted

Fauji Cement Company Limited 14 - 300,000

Askari Bank Limited 5,230,991 5,230,991

Un-quoted

Foundation Wind Energy - I Limited 1,225,873 1,225,873

Foundation Wind Energy - II Limited 1,234,692 1,234,692

7,691,556 7,991,556

10.3 Investments in subsidiaries - at cost

Quoted

Fauji Foods Limited

Gross value 10.5 7,421,766 4,672,902

Impairment in value of investment (420,000) (420,000)

7,001,766 4,252,902

Un-quoted

Fauji Meat Limited

Gross value 6,885,000 6,885,000

Impairment in value of investment 10.6 (2,322,257) (1,100,000)

4,562,743 5,785,000

FFBL Foods Limited 298,518 298,518

FFBL Power Company Limited 6,440,625 6,440,625

18,303,652 16,777,045

10.4 Investment - available for sale - unquoted

Arabian Sea Country Club Limited (ASCCL)

300,000 ordinary shares of Rs.10 each 3,000 3,000

Less: Impairment in value of investment 3,000 3,000

- -

10.5 Pursuant to the approval by the members of the Company, in the Annual General Meeting (AGM) of the Company, held on March 30, 2020, the Company communicated its intention, to the Board of Directors of FFL, to exercise the option to convert its sub-ordinated loan and related accrued mark-up, as of December 31, 2019, amounting to Rs. 2,630,000 thousand and Rs. 118,864 thousand, respectively, into 274,886,371 ordinary shares of FFL, at their face value. Accordingly, FFL, after completing the necessary regulatory requirements and pursuant to approval of their members in its AGM held on April 02, 2020, has allocated 274,886,371 ordinary shares to the Company, on July 15, 2020.

10.6 Impairment charge on investment in Fauji Meat Limited (FML)

As at the reporting date, the Company performed an impairment test for it’s investment in FML. The Company has determined recoverable amount of FML, based on a value-in-use calculation, which was lower than the carrying amount of the investment in the Company’s financial statements due to challenging trading and economic conditions, affecting FML’s domestic and export markets. Accordingly, an impairment charge of


15

Rs. 1,222 million has been recognized in the statement of profit or loss, as ‘Other Expenses’. Value-in-use was estimated using probability weighted cash flow projections, covering a six-year period. The pre-tax risk adjusted discount rate and the long-term market growth-rate applied to cash flow projections is 11% (2019: 15.76%) and 3% (2019: 2.75%), respectively, both of which are inherently uncertain. The cash flow projections are sensitive to assumptions regarding the sales growth rate, operating margin, long-term market growth-rate and discount rate. These assumptions are based upon the Company’s past experience and plans for the future periods, and are consistent with the external sources of information.


2020 2019


Note (Rupees '000)

11 LONG-TERM LOANS

Related parties

Fauji Meat Limited 11.1 863,000 500,000

Fauji Foods Limited 11.2 1,696,372 2,630,000

2,559,372 3,130,000

Less: Current portion shown under current assets 2,059,372 -

500,000 3,130,000

11.1 The outstanding amount of Subordinated loan consists of:

- Rs. 363 million disbursed during the period, payable within 1 year from date of disbursement of each respective tranche, commencing from June 22, 2021. The total limit of loan to FML, approved in the Company’s annual general meeting, on March 30, 2020, is Rs. 3,000 million (unless otherwise utilized). The loan carries mark-up at the rate which is higher of the Company’s borrowing cost or KIBOR for the relevant period plus 1.5%, per annum, on the terms set out in the agreement and in compliance with the requirements of section 199 of Companies Act, 2017; and

- Rs. 500 million, payable within 5 years from date of disbursement of each respective tranche, commencing from March 20, 2024. The loan carries mark-up at the rate which is higher of the Company’s borrowing cost or KIBOR for the relevant period plus 0.5%.

The Company has the right, as and when desired by the Board of Directors, to convert all or part of these outstanding loans (including mark-up accrued thereon) into the ordinary shares of FML by written notice to FML, subject to approval of Securities and Exchange Commission of Pakistan and fulfillment of other regulatory requirements.

11.2 This represents amount disbursed during the period, payable within 1 year from date of disbursement of each respective tranche, commencing April 22, 2021. The total limit of cash loan to FFL, approved in the Company’s annual general meeting, on March 30, 2020, is Rs. 2,500 million (unless otherwise utilized), out of total financial support of Rs. 4,500 million. The loan carries mark-up at the rate which is higher of the Company’s borrowing cost or KIBOR for the relevant period plus 1.5%, per annum, on the terms set out in the agreement and in compliance with the requirements of section 199 of Companies Act, 2017. The Company has the right, as and when desired by the Board of Directors, to convert all or part of these outstanding loans (including mark-up accrued thereon) into the ordinary shares of FFL by written notice to FFL, subject to approval of Securities and Exchange Commission of Pakistan and fulfillment of other regulatory requirements.

12 OTHER RECEIVABLES

This includes an amount of Rs. 4,733 million (December 31, 2019: Rs. 2,886 million) receivable from Fauji Fertilizer Company Limited (FFCL), an associated company, on account of amounts received from customers against sales of the Company’s products by FFCL under an inter-company services agreement.


2020 2019


(Rupees '000)

13 SHORT-TERM INVESTMENTS

At amortized cost

Term deposits with banks and financial institutions - 1,000,000

Investments at fair value through profit or loss

Mutual funds - 9,029

- 1,009,029


16

14 NON-CURRENT ASSET HELD FOR SALE

The Board of Directors of the Company approved the plan to dispose-off all of its shareholding in Fauji Cement Company Limited (FCCL) through open market. Pursuant to this decision, the Company has disposed-off 6,318,000 shares at average price of Rs. 20.81 per share; resulting in a gain of Rs. 30,619 thousand. The sale of remaining 12,432,000 shares is expected to be completed within 1 year from the reporting date. Accordingly, as of September 30, 2020, the Company has classified its residual investment as held for sale.

Quarter ended September 30, Nine months ended September 30, 2020 2019 2020 2019

Note (Rupees '000) (Rupees '000) 15 SALES - NET

Gross sales 25,698,709 22,607,185 51,120,126 44,751,310 Less:

Sales tax 509,786 453,923 1,018,593 877,182 Trade discount - - 120,573 215,045 Commission 15.1 8,762 7,305 19,096 15,627

518,548 461,228 1,158,262 1,107,854 25,180,161 22,145,957 49,961,864 43,643,456

15.1 Commission is paid at the rate of Re. 1 per bag sold by Fauji Fertilizer Company Limited, based on an inter-company services agreement.

Quarter ended September 30, Nine months ended September 30, 2020 2019 2020 2019

(Rupees '000) (Rupees '000) 16 COST OF SALES

Raw materials consumed 12,609,794 15,096,106 28,876,419 38,833,523 Packing materials consumed 210,541 230,886 550,179 602,710 Fuel and power 2,366,113 3,156,939 7,933,042 8,414,970 Chemicals and supplies consumed 63,362 60,517 173,065 159,387 Salaries, wages and benefits 413,179 407,284 1,255,814 1,038,090 Rent, rates and taxes 15,000 22,894 94,459 64,238 Insurance 37,044 53,623 144,127 86,685 Travel and conveyance 25,182 33,749 76,358 102,183 Repairs and maintenance 204,536 170,185 805,737 961,491 Communication, establishment and other expenses 35,962 32,452 155,161 75,688 Provision for slow moving stores 21,000 - 56,000 - Provision for sales tax 300,000 - 604,684 - Depreciation 193,540 372,719 581,006 1,096,788 Opening stock - work in process 61,730 45,665 194,733 95,760 Closing stock - work in process (29,931) (67,137) (29,931) (67,137)Cost of goods manufactured 16,527,052 19,615,882 41,470,853 51,464,376 Opening stock - finished goods 13,246,355 14,461,432 11,712,363 2,816,175 Closing stock - finished goods (8,541,280) (14,207,185) (8,541,280) (14,207,185)Cost of sales 21,232,127 19,870,129 44,641,936 40,073,366


17


2020 2019 2020 2019


17 OTHER INCOME

Profit on bank balances and term deposits 90,999 183,601 354,391 428,082

Gain / dividend from mutual funds - 807 380 130,921

Gain on disposal / dividend from FCCL 30,619 14,062 30,619 28,125

Dividend from PMP 21,494 (17,238) 671,290 746,784

Dividend from FWEL-I & FWEL-II - - - 175,000

Dividend from AKBL - - 407,826 271,884

Dividend from FPCL 1,996,594 1,610,156 1,996,594 1,610,156

Income from subsidiaries 203,199 16,488 244,672 49,455

Mark-up on sub-ordinated loans-FFL 31,837 44,397 214,840 60,669

Mark-up on sub-ordinated loans-FML 17,383 118,789 51,672 294,497

Guarantee fee-FML 3,781 - 7,603 -

Guarantee fee-FFL 9,271 - 18,723 -

Scrap sale and other receipts 79,231 68,655 173,722 151,968

Gain on disposal of property, plant & equipment 59,955 14,783 58,007 37,740

2,544,363 2,054,500 4,230,339 3,985,281

18 TAXATION - NET

Current tax 680,416 573,357 1,210,812 1,076,010

Deferred tax (63,689) 1,022,395 (186,185) 37,188

616,727 1,595,752 1,024,627 1,113,198

Nine months ended September 30,

2020 2019

(Rupees '000)

19 CASH GENERATED FROM / (USED IN) OPERATIONS

Profit / (loss) before taxation 123,177 (1,304,685)

Adjustment for non-cash charges and other items:

Provision for gratuity 50,421 48,881

Exchange losses 225,868 595,786

Provision for compensated absences 55,257 72,067

Provision for sales tax 604,684 -

Provision for slow moving stores 56,000 -

Impairment charge on investment 1,222,257 -

Depreciation 694,273 1,239,882

Finance costs 3,537,635 3,558,628

Dividend from joint venture (671,290) (746,784)

Dividend from associates (407,826) (475,009)

Dividend from subsidiary (1,996,594) (1,610,156)

Gain on disposal of investment (30,619) -

Profit on bank balances and term deposits (354,771) (559,003)

Gain on disposal of property, plant and equipment (58,007) (37,740)

Mark-up on sub-ordinated loans (266,512) (355,166)

Guarantee fee (26,326) -

Operating profit before working capital changes 2,757,627 426,701


18


2020 2019

(Rupees '000)

Changes in working capital:

Stores and spares 185,152 (48,697)

Stock-in-trade 1,077,862 (11,655,816)

Trade debts 2,805,966 (344,999)

Advances 184,020 (180,891)

Trade deposits and short-term prepayments (4,332) (161,182)

Other receivables (1,958,357) (1,949,638)

Sales tax refundable 491,562 (3,123,745)


9,833,358 (12,026,269)

Cash generated from / (used in) operations 12,590,985 (11,599,568)

20 RELATED PARTY TRANSACTIONS

The Company has related parties which comprise of subsidiaries, a joint venture, entities under common directorship, directors, key management personnel, share holders and employees funds. Fauji Fertilizer Company Limited (FFCL) has a 49.88% share holding in the Company (2019: 49.88%), while Fauji Foundation (FF) holds 18.29% shares (2019: 18.29%) in the Company. Transactions with related parties and balances outstanding, other than those have been disclosed elsewhere in these condensed interim financial statements are given below. The carrying values of investments, balance receivable and loans to related parties are disclosed in note 10, 11 and 12 to these condensed interim financial statements.


2020 2019

(Rupees '000)

Transactions with Fauji Foundation:

Dividend paid - 170,842

Services provided 119 3,738

Contribution paid for Youm-e-Shohada and Defence Day - 6,000

Transactions with subsidiary companies:

Fauji Meat Limited

Balance receivable 26,085 5,173 *

Material / services provided 21,823 7,178

Receipts against material / services 911 7,178

Guarantee fee 7,603 -

Mark-up on sub-ordinated loan 51,672 294,497

Mark-up and guarantee fee receivables on sub-ordinated loan 156,942 97,667 *

Receipts against mark-up on sub-ordinated loan - 62,129

FFBL Power Company Limited


Material / services received 7,279,649 7,595,123

Balance payable 4,168,874 874,912 *


Receipts against material / services 481,795 399,340

Payments against material / services 5,182,487 9,259,104



19


2020 2019

(Rupees '000)

Fauji Foods Limited


Expenses incurred on behalf of FFBL 4,177 -

Receipts against material / services 3,353 2,173

Receivable against material / services 9,045 - *

Guarantee fee 18,723 -

Mark-up and guarantee fee receivables on sub-ordinated loan 214,840 60,669

Mark-up receivables on sub-ordinated loan 233,563 118,864 *

FFBL Foods Limited

Expenses incurred 772 556

Non-Capex purchased - 77

Payment during period - 21

Receipts during period 772 500

Transactions with associates:

Fauji Fertilizer Company Limited

Services and material acquired 1,095,860 843,332

Services and material provided 1,022 1,605

Receipts under consignment account 52,290,398 41,800,136

Commission charged 19,096 15,627

Balance receivable 4,732,726 2,885,789 *


Askari Bank Limited

Balances at bank 1,414,793 337,116 *

Profit on bank balances 145,051 102,313

Long-term loans 416,667 500,000 *

Mark-up on long-term loans 46,917 40,361

Mark-up payable on long-term loans 267 18,740 *

Dividend received 407,826 271,884

Fauji Cement Company Limited

Dividend received - 28,125

Foundation Wind Energy - I Limited & Foundation Wind Energy - II Limited



20


2020 2019

(Rupees '000)

Transactions with joint venture:

Pakistan Maroc Phosphore S.A, Morocco

Purchase of raw materials 23,592,490 29,789,585

Expenses incurred on behalf of joint venture 3,647 17,801

Balance payable at the period end - secured 9,349,057 6,593,346 *

Balance receivable at the period end - unsecured 9,465 9,231 *


Other related parties:

Contribution to Provident Fund 55,142 55,048

Payment to gratuity fund 57,797 77,059

Payment to Workers' (Profit) Participation Fund - 10,954

Remuneration of key management personnel 129,478 183,046

Meeting fee to directors 6,225 5,175

Balance payable to Workers’ Welfare Fund 561,622 561,622 *

Payable to Gratuity Fund 271,037 278,413 *

* These balance of accounts, appearing as comparatives, are as at December 31, 2019 (audited).

In addition to the above:

- a ranking charge amounting to US$ 91,456,667 and Rs. 4,000 million (2019: US$ 91,456,667 and Rs. 4,000 million) has been registered on the assets of the Company, in respect of project financing arranged by Foundation Wind Energy-I Limited.

- a ranking charge amounting to US$ 89,146,667 and Rs. 4,000 million (2019: US$ 89,146,667 and Rs. 4,000 million) has been registered on the assets of the Company, in respect of project financing arranged by Foundation Wind Energy-II Limited.

- the Company has issued standby letter of credit amounting to Rs. 934 million in favor of the FML under the Diminishing Musharaka Agreement.

- the Company has provided sponsor support, to lenders of project financing arranged by FPCL, to fund any shortfall, to the extent FPCL is unable to fulfill its financial obligations:

(i) up to Rs. 29,150 million (2019: Rs. 29,150 million) and all cost over runs, till technical completion date; and

(ii) up to Rs. 8,000 million after project completion date.

- the Company has committed to provide collateral or other sponsor support to FML, the total limit of such facility approved in the Company’s annual general meeting, on March 30, 2020, is disclosed in note 11.1. During the period, the Company provided sponsor support in the form of corporate guarantee amounting to Rs. 1,000 million.

- the Company has committed to provide collateral or other sponsor support to FFL, the total limit of such facility approved in the Company’s annual general meeting, on March 30, 2020, is disclosed in note 11.2 . During the period, the Company provided sponsor support in the form of cash collateral for FFL with various banking institutions, aggregating to Rs. 2,300 million.


21

21 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

21.1 Financial risk factors

The Company's activities expose it to a variety of financial risks including market risk (currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

There have been no changes in the risk management policies during the period; consequently these condensed interim financial statements do not include all the financial risk management information and disclosures required in the annual financial statements.

21.2 Fair value estimation

The table below analyzes financial instruments carried at fair value by the valuation method. The different levels have been defined as follows:

- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)

- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) (level 2)

- Inputs for the asset or liability that are not based on observable market data (level 3)

Level 1 Level 2 Level 3

(Rupees' 000)

September 2020 - un-audited

ASSETS

Financial assets at fair value through profit or loss

- Short-term investments - - -

December 2019 - audited

ASSETS


- Short-term investments 9,029 - -

22 GENERAL

22.1 Figures have been rounded off to the nearest thousand rupees.

22.2 These condensed interim financial statements were authorized for issue on October 27, 2020 by the Board of Directors of the Company.


22

NOTES

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

24

CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT SEPTEMBER 30, 2020


2020 2019


Note (Rupees '000)

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Share capital 5 9,341,100 9,341,100

Capital reserve 228,350 228,350

Statutory reserve 1,735,925 1,329,299

Revenue reserves

Translation reserve 3,368,322 2,866,785

Revaluation reserve on available for sale investments, net of tax 511,537 (744,310)

Accumulated loss (5,804,154) (3,875,066)

9,381,080 9,146,158

Non-Controlling Interest 2,461,303 1,582,983

11,842,383 10,729,141

NON-CURRENT LIABILITIES

Long-term loans 6 27,009,225 31,899,500

Finance lease liability 493,686 541,905

Deferred liabilities 7 3,839,129 3,641,252

31,342,040 36,082,657

CURRENT LIABILITIES AND PROVISIONS


Advances from customers 1,197,118 193,815

Unpaid dividend 10,954 10,954

Unclaimed dividend 118,076 119,606

Accrued interest 974,096 1,520,388

Short-term borrowings 35,324,277 39,598,125

Current portion of long-term loans 6 11,549,860 8,951,344

Current portion of finance lease liability 120,541 183,998

89,629,215 87,217,104

132,813,638 134,028,902

CONTINGENCIES AND COMMITMENTS 8

The annexed notes, from 1 to 22, form an integral part of these condensed interim consolidated financial statements.

25


2020 2019


Note (Rupees '000)

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 9 50,140,354 50,960,138

Intangible assets 442,268 419,534

Long-term investments 10 23,600,602 20,238,869

Long-term advances - 18,385

Long-term deposits 85,249 85,249

74,268,473 71,722,175

CURRENT ASSETS

Stores and spares 3,485,306 3,707,246

Stock-in-trade 15,672,763 17,137,919

Trade debts 7,995,517 10,411,213

Advances 1,242,490 1,265,006

Trade deposits and short-term prepayments 340,228 296,119

Interest accrued 6,787 42,428

Other receivables 11 7,875,069 6,089,123

Income tax refundable - net 3,853,760 4,360,559

Sales tax refundable 8,892,246 9,793,750

Short-term investments 12 20,604 1,409,029

Cash and bank balances 8,913,247 7,794,335

58,298,017 62,306,727

Non-current asset held for sale 13 247,148 -

132,813,638 134,028,902


26

CONDENSED INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2020


2020 2019 2020 2019


Sales - net 14 29,431,687 25,899,710 60,915,183 54,380,377

Cost of sales 15 (23,689,784) (21,897,646) (50,330,916) (46,092,735)

Gross profit 5,741,903 4,002,064 10,584,267 8,287,642

Selling and distribution expenses (1,845,473) (2,292,299) (4,344,961) (5,273,242)

Administrative expenses (483,323) (655,024) (1,401,747) (1,639,965)

3,413,107 1,054,741 4,837,559 1,374,435

Finance costs (1,638,715) (2,611,572) (6,782,870) (6,879,021)

Other operating expenses 45,428 305,803 (406,946) (730,911)

1,819,820 (1,251,028) 2,352,257 (6,235,497)

Other income 16

Share of profit of joint venture and associates - net 1,838,514 1,121,207 2,887,798 1,827,377

Others 311,499 395,453 794,094 984,811

2,150,013 1,516,660 3,681,892 2,812,188

Profit / (loss) before taxation 3,969,833 265,632 1,329,635 (3,423,309)

Taxation - net 17 (723,248) (1,895,741) (1,305,222) (1,711,251)

Profit / (loss) after taxation 3,246,585 (1,630,109) 24,413 (5,134,560)

Attributable to:

- Owners of the Holding Company 3,225,943 (1,317,169) 346,694 (4,069,084)

- Non-controlling interest 20,642 (312,940) (322,281) (1,065,476)

3,246,585 (1,630,109) 24,413 (5,134,560)

Earning / (loss) per share - basic and diluted (Rupees) 3.45 (1.41) 0.37 (4.36)



27

CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2020


2020 2019 2020 2019


Profit / (loss) after taxation 3,246,585 (1,630,109) 24,413 (5,134,560)

Other comprehensive income / (loss)

Exchange difference on translating a joint venture 319,069 972,156 475,529 1,480,560

Effect of translation - share of associate 4,540 32,230 26,008 36,210

Revaluation reserve on available for sale investments 682,851 (158,209) 1,477,467 (594,756)

Related deferred tax (102,428) 23,731 (221,620) 89,213

580,423 (134,478) 1,255,847 (505,543)

Total comprehensive income / (loss) 4,150,617 (760,201) 1,781,797 (4,123,333)

Attributable to:

- Owners of the Holding Company 4,129,975 (447,261) 2,104,078 (3,057,857)

- Non-controlling interest 20,642 (312,940) (322,281) (1,065,476)

4,150,617 (760,201) 1,781,797 (4,123,333)



28

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2020

Reserves

Share capital Capital reserve

Revaluation reserve on available for sale

investments

Statutory reserve

Translation reserve

Accumulated Profit / (loss)

Non- controlling

interest

Total

(Rupees ' 000)

Balance as at January 01, 2019 - audited 9,341,100 228,350 (481,495) 1,050,097 1,688,216 4,383,873 3,826,318 20,036,459


Loss for the period after taxation - - - - - (4,069,084) (1,065,476) (5,134,560)

Other comprehensive income for the period - - (505,543) - 1,516,770 - - 1,011,227

Total comprehensive loss for the period - - (505,543) - 1,516,770 (4,069,084) (1,065,476) (4,123,333)

Transfer to statutory reserve - - - 225,172 - (225,172) - -



Final dividend 2018 (Re. 1 per ordinary share) - - - - - (934,110) - (934,110)

FPCL dividend 2019 (Rs. 2.5 per ordinary share) - - - - - - (536,719) (536,719)

Total transactions with owners - - - - - (934,110) (536,719) (1,470,829)

Balance as at September 30, 2019 9,341,100 228,350 (987,038) 1,275,269 3,204,986 (844,493) 2,224,123 14,442,297

Balance as at January 01, 2020 - audited 9,341,100 228,350 (744,310) 1,329,299 2,866,785 (3,875,066) 1,582,983 10,729,141


Profit for the period after taxation - - - - - 346,694 (322,281) 24,413

Other comprehensive income for the period - - 1,255,847 - 501,537 - - 1,757,384

Total comprehensive income for the period - - 1,255,847 - 501,537 346,694 (322,281) 1,781,797

Transfer to statutory reserve - - - 406,626 - (406,626) - -



FPCL dividend 2020 (Rs. 3.1 per ordinary share) - - - - - - (665,531) (665,531)

Acquisition of NCI share (note 5.3) (1,869,156) 1,866,132 (3,024)

Balance as at September 30, 2020 9,341,100 228,350 511,537 1,735,925 3,368,322 (5,804,154) 2,461,303 11,842,383



29

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2020

2020 2019

Note (Rupees '000)

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from / (used in) operating activities 18 14,823,719 (8,203,954)

Income tax paid (848,011) (1,145,053)

Payment to gratuity fund (55,189) (94,329)

Finance cost paid (7,296,870) (5,912,737)

Compensated absences paid (37,731) (45,169)

Payment to Workers Welfare Fund (5,626) -

Payment to Workers' (Profit) Participation Fund (19,421) (139,502)

Net cash generated from / (used in) operating activities 6,560,871 (15,540,744)

CASH FLOWS FROM INVESTING ACTIVITIES

Fixed capital expenditures (1,290,980) (3,088,198)

Intangibles (7,431) -

Long-term advances 18,385 -


Receipt from disposal of investment 131,707 -

Sale proceeds of property, plant and equipment 130,258 132,438

Long-term deposit - 944

Investment at fair value through profit or loss - net 9,212 5,406,893

Profit received on bank balances and term deposits 485,015 652,359

Net cash generated from investing activities 555,282 4,614,351

CASH FLOWS FROM FINANCING ACTIVITIES

Short-term borrowings - net (6,548,004) 5,605,658

Long-term loans (2,324,052) (2,031,989)

Finance lease liability (111,676) (138,766)

Dividend paid (667,061) (1,469,206)

Net cash (used in) / generated from financing activities (9,650,793) 1,965,697

NET DECREASE IN CASH AND CASH EQUIVALENTS (2,534,640) (8,960,696)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD (15,903,799) (4,564,653)

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD (18,438,439) (13,525,349)

CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the condensed interim consolidated statement of cash flows comprises the following condensed interim consolidated statement of financial position amounts:

- Cash and bank balances 8,913,247 8,343,082

- Short-term highly liquid investments 12 20,604 2,270,000

- Short-term running finance (27,372,290) (24,138,431)

(18,438,439) (13,525,349)



NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2020

30

1 THE GROUP AND ITS OPERATIONS

Fauji Fertilizer Bin Qasim Limited is a public limited company incorporated in Pakistan under the Companies Ordinance,1984 (now replaced by the Companies Act, 2017 with effect from May 31, 2017). The shares of the Company are quoted on Pakistan Stock Exchange (PSX). The registered office of FFBL is situated at FFBL Tower, C1/C2, Sector B, Jinnah Boulevard, DHA Phase II, Islamabad, Pakistan. The principal objective of FFBL is manufacturing, purchasing and marketing of fertilizers. FFBL commenced its commercial production effective January 01, 2000.

Fauji Fertilizer Bin Qasim Limited group comprises of Fauji Fertilizer Bin Qasim Limited (FFBL / the Holding Company) and its subsidiaries, Fauji Meat Limited (FML), FFBL Foods Limited, FFBL Power Company Limited (FPCL) and Fauji Foods Limited (FFL) collectively referred as ("Group").

Fauji Meat Limited is a public limited company incorporated on September 05, 2013 in Pakistan under the Companies Ordinance, 1984 (now replaced by the Companies Act, 2017 with effect from May 31, 2017). The principal objectives of FML are to establish a meat abattoir unit for halal slaughtering of animals to obtain meat for local and export sale purposes.

FFBL Foods Limited is a public limited company incorporated on July 04, 2013 in Pakistan under the Companies Ordinance, 1984 (now replaced by the Companies Act, 2017 with effect from May 31, 2017). The principal objective is to produce multi brand dairy products.

FFBL Power Company Limited is a public limited company incorporated on June 27, 2014 in Pakistan under the Companies Ordinance, 1984 (now replaced by the Companies Act, 2017 with effect from May 31, 2017). The principal activity is generation and supply of electricity and all other forms of energy.

Fauji Foods Limited (FFL) was incorporated in Pakistan on September 26, 1966 as a public company and its shares are quoted on PSX. It is principally engaged in processing and sale of toned milk, milk powder, fruit juices, allied dairy and food products.

2 BASIS OF PREPARATION

These condensed interim consolidated financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable in Pakistan for interim financial reporting comprise of:

- International Accounting Standard (IAS) 34, - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, 2017; and

- Provisions of and directives issued under the Companies Act, 2017.

Where the provisions of and directives issued under the Companies Act, 2017 differ with the requirements of IAS 34, the provision of and directives issued under the Companies Act, 2017 have been followed.

The disclosures in these condensed interim consolidated financial statements do not include the information reported for full annual consolidated financial statements and should therefore be read in conjunction with the consolidated financial statements for the year ended December 31, 2019. The comparative Consolidated Statement of Financial Position is extracted from the annual consolidated financial statements, as of December 31, 2019, whereas the Consolidated Statement of Profit or Loss and the Consolidated Statement of Other Comprehensive Income, the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity are extracted from the unaudited condensed interim consolidated financial statements, for the period ended September 30, 2019.

These condensed interim consolidated financial statements are unaudited and is being submitted to the members, as required under Section 237 of the Companies Act, 2017, and the Listed Companies (Code of Corporate Governance) Regulations, 2019.

3 ACCOUNTING POLICIES

The accounting policies and methods of computation adopted for the preparation of these condensed interim consolidated financial statements are similar to those applied in the preparation of the consolidated financial statements for the preceding year, ended December 31, 2019.

4 IMPACT OF COVID-19

On January 31, 2020, the World Health Organization (WHO) announced a global health emergency due to Corona virus. Because of the rapid increase in exposure globally, on March 11, 2020, the WHO classified the COVID-19 outbreak as a pandemic.

The Government of Pakistan imposed restrictions on movement temporarily. The Group has adopted the required regulations. The plant operations remained broadly unaffected and there has been no significant effect on sales. Accordingly, till date there has been no effects on Group’s financial as well as operational results. Management is also not expecting any significant disruptions in the future. Management, however, continue to evaluate it’s effect till the date of authorization of these financial statements for current and next year.



31

5 SHARE CAPITAL

5.1 Pursuant to Extraordinary General Meeting held on September 09, 2020, the authorized share capital of the Holding Company has been increased from Rs. 11,000,000,000 (1,100,000,000 shares of Rs. 10 each) to Rs. 15,000,000,000 (1,500,000,000 shares of Rs. 10 each).

5.2 Group consists of following subsidiary companies:

Ownership in 2020

Ownership in 2019

Fauji Meat Limited 90.18% 90.18%

FFBL Power Company Limited 75.00% 75.00%

FFBL Foods Limited 100.00% 100.00%

Fauji Foods Limited 67.50% 50.59%

The condensed interim financial statements of subsidiary companies have been consolidated on line by line basis. The carrying value of investments held by the Holding Company is eliminated against the subsidiaries’ share capital and pre-acquisition reserves. All material intercompany balances and transactions have been eliminated.

5.3 During the year, pursuant to the approval by the members of the Holding Company and FFL, in their respective Annual General Meeting (AGM), held on March 30, 2020 and April 02, 2020, respectively, the Holding Company has converted its sub-ordinated loan to FFL and related accrued mark-up, as of December 31, 2019, amounting to Rs. 2,630,000 thousand and Rs. 118,864 thousand, respectively, into 274,886,371 ordinary shares of FFL, at their face value. Accordingly, the Holding Company’s proportion of ownership interest, in FFL, has increased from 50.59% to 67.5%, with corresponding reduction in proportion of ownership interest of NCI; resulting in an increase in accumulated losses, attributable to the shareholders of Holding Company, by Rs. 1,866,132 thousand.


2020 2019


Note (Rupees '000)

6 LONG-TERM LOANS

Loans from banking companies-secured 38,559,085 40,850,844

Less: Current portion shown under current liabilities 11,549,860 8,951,344

27,009,225 31,899,500

7 DEFERRED LIABILITIES

Compensated leave absences 707,670 681,824

Deferred taxation 7.1 3,131,459 2,959,428

3,839,129 3,641,252

7.1 DEFERRED TAXATION - NET

The balance of deferred tax is in respect of the following major taxable / (deductible) temporary differences:

Accelerated depreciation 3,094,097 2,885,948

Share of profit of joint venture and associates - net 1,320,479 1,142,960

Share of profit of subsidiary 598,765 738,287

Provision for inventory obsolescence (95,911) (38,003)

Provision for doubtful other receivables (57,116) (57,116)

Deferred tax on revaluation of available for sale investments 79,290 (142,330)

Unabsorbed losses, tax credits and others (1,808,145) (1,570,318)

3,131,459 2,959,428


32


2020 2019


(Rupees '000)


Contingencies

i) Guarantees issued by banks on behalf of FFBL 59,409 53,409

ii) Group's share of contingent liabilities of Fauji Cement Company Limited as at June 30, 2020 - 24,222

iii) Group's share of contingent liabilities of Foundation Wind Energy - I Limited as at June 30, 2020 64,690 64,296

iv) Group's share of contingent liabilities of Foundation Wind Energy - II Limited as at June 30, 2020 255,500 240,800

v) Group's share of contingent liabilities of Askari Bank Limited as at June 30, 2020 44,827,483 41,498,101

vi) Contingent liabilities of Fauji Meat Limited 308,223 308,223

vii) Contingent liabilities of Fauji Foods Limited 2,878,450 2,878,680

Commitments

i) Capital expenditures - FFBL 217,392 400,541

ii) Letters of credit - FFBL 1,149,705 763,244

iii) Group's share of commitments of FWEL- I & FWEL- II as at June 30, 2020 1,089,951 222,534

iv) Group's share of commitments of PMP as at June 30, 2020 73,348 65,710

v) Commitments of FML - 4,040

vi) Commitments of FPCL 1,125,410 1,697,660

vii) Group's share of commitments of FCCL as at June 30, 2020 - 4,882

viii) Commitments of FFL 730 29,930



Additions during the period / year 1,290,980 4,240,851

Disposals during the period / year (517,445) (250,179)

Depreciation during the period / year (2,020,791) (3,315,801)

Depreciation charged on disposals during the period / year 460,019 154,511

Adjustments during the period / year (32,547) (87,007)

Closing written down value 50,140,354 50,960,138



33


2020 2019


(Rupees '000)


Contingencies

i) Guarantees issued by banks on behalf of FFBL 59,409 53,409

ii) Group's share of contingent liabilities of Fauji Cement Company Limited as at June 30, 2020 - 24,222

iii) Group's share of contingent liabilities of Foundation Wind Energy - I Limited as at June 30, 2020 64,690 64,296

iv) Group's share of contingent liabilities of Foundation Wind Energy - II Limited as at June 30, 2020 255,500 240,800

v) Group's share of contingent liabilities of Askari Bank Limited as at June 30, 2020 44,827,483 41,498,101

vi) Contingent liabilities of Fauji Meat Limited 308,223 308,223

vii) Contingent liabilities of Fauji Foods Limited 2,878,450 2,878,680

Commitments

i) Capital expenditures - FFBL 217,392 400,541

ii) Letters of credit - FFBL 1,149,705 763,244

iii) Group's share of commitments of FWEL- I & FWEL- II as at June 30, 2020 1,089,951 222,534

iv) Group's share of commitments of PMP as at June 30, 2020 73,348 65,710

v) Commitments of FML - 4,040

vi) Commitments of FPCL 1,125,410 1,697,660

vii) Group's share of commitments of FCCL as at June 30, 2020 - 4,882

viii) Commitments of FFL 730 29,930



Additions during the period / year 1,290,980 4,240,851

Disposals during the period / year (517,445) (250,179)

Depreciation during the period / year (2,020,791) (3,315,801)

Depreciation charged on disposals during the period / year 460,019 154,511

Adjustments during the period / year (32,547) (87,007)

Closing written down value 50,140,354 50,960,138


2020 2019


Note (Rupees '000)

10 LONG-TERM INVESTMENTS

Investment in joint venture - equity method

Pakistan Maroc Phosphore S.A, Morocco

Balance brought forward 5,991,039 4,770,687

Share of profit 241,648 803,230

Dividend (671,290) (746,784)

Gain on translation of net assets 475,529 1,163,906

Closing balance 6,036,926 5,991,039

Investment in associates - equity method


Balance brought forward 422,373 420,371


Dividend - (28,125)

Disposal of investment 13 (178,806) -

Investment held for sale 13 (247,148) -

Closing balance - 422,373

Foundation Wind Energy - I Limited

Opening balance 2,899,002 2,388,392


Dividend - (52,500)


Foundation Wind Energy - II Limited



Dividend - (122,500)


Askari Bank Limited


Share of profit 1,644,030 1,120,316

Dividend (407,825) (271,884)

Revaluation reserve of available for sale investment 1,477,467 (309,194)

Effect of translation 26,008 14,663

Closing balance 10,791,596 8,051,916

Investment - available for sale - unquoted

Arabian Sea Country Club Limited (ASCCL)

300,000 ordinary shares of Rs. 10 each 3,000 3,000

Less: Impairment in value of investment 3,000 3,000

- -

23,600,602 20,238,869


34

(Un - audited) (Un - audited)


2020 2019 2020 2019


14 SALES - NET

Gross sales 30,827,841 27,363,035 64,986,368 58,377,209

Less:

Sales tax 1,194,750 1,248,149 3,314,016 3,048,432

Trade discount 148,953 113,630 514,275 673,121

Advance tax u/s 235 43,689 93,999 223,798 257,652

Commission 14.1 8,762 7,547 19,096 17,627

1,396,154 1,463,325 4,071,185 3,996,832

29,431,687 25,899,710 60,915,183 54,380,377

14.1 It includes commission paid by the Holding Company at the rate of Re.1 per bag to Fauji Fertilizer Company Limited, based on an inter-company services agreement.

11 OTHER RECEIVABLES

This includes an amount of Rs. 4,733 million (December 31, 2019: Rs. 2,886 million) receivable from Fauji Fertilizer Company Limited, an associated company on account of amount recovered from customers, against sales of the Holding Company’s products under an inter-company services agreement.


2020 2019


(Rupees '000)

12 SHORT-TERM INVESTMENTS

Loans and receivables

Term deposits with banks and financial institutions 20,604 1,400,000

Investments at fair value through profit or loss

Mutual funds - 9,029

20,604 1,409,029

12.1 The balance at the period end includes investment in term deposits receipt, having maturity periods up to 01 month, and carrying mark-up at 6.75% per annum (December 31, 2019: 12.80% to 14.50% per annum).

13 NON-CURRENT ASSET HELD FOR SALE

The Board of Directors of the Holding Company approved the plan to dispose-off all of its shareholding in Fauji Cement Company Limited (FCCL) through open market. Pursuant to this decision, the Holding Company has disposed-off 6,318,000 shares at average price of Rs. 20.81 per share; resulting in a loss of Rs. 11,971 thousand. The sale of remaining 12,432,000 shares is expected to be completed within 1 year from the reporting date. Accordingly, as of September 30, 2020, the Holding Company has classified its residual investment as held for sale. The Holding Company has recognized a loss of Rs. 35,128 thousand in the consolidated statement of profit or loss; being the difference between the carrying amount of residual investment and fair value less cost to sell of remaining shares of FCCL, held by the Holding Company.



35


2020 2019 2020 2019


15 COST OF SALES

Raw materials consumed 15,381,312 18,514,001 37,261,028 48,233,581

Packing materials consumed 744,046 693,973 1,905,607 2,004,449

Fuel and power 409,607 459,290 920,315 1,098,670

Ash dumping 14,623 9,141 24,702 22,339

Stores and supplies consumed 150,152 130,556 461,435 410,237

Salaries, wages and benefits 607,976 563,997 1,974,027 1,814,376

Repairs and maintenance 322,235 311,929 1,086,721 1,243,834

Travel and conveyance 36,603 60,374 116,682 164,927

Rent, rates and taxes 15,611 16,277 96,589 67,233

Insurance 83,047 106,715 280,554 198,776

Utilities 9,287 22,951 61,686 37,497

Provision for slow moving stores 21,000 - 56,000 -

Provision for stock-in-trade 25,751 - 25,751 -

Provision for sales tax 300,000 - 604,684 -

Communication, establishment and other expenses 51,479 (13,077) 189,218 67,275

Depreciation 621,585 777,149 1,843,868 2,271,531

Opening stock - work in process 259,143 95,212 341,189 133,055

Closing stock - work in process (219,468) (126,988) (219,468) (126,988)

Cost of goods manufactured 18,833,989 21,621,500 47,030,588 57,640,792

Opening stock - finished goods 13,577,762 14,979,717 12,022,295 3,155,514

Closing stock - finished goods (8,721,967) (14,703,571) (8,721,967) (14,703,571)

Cost of sales 23,689,784 21,897,646 50,330,916 46,092,735

16 OTHER INCOME

Share of profit from joint venture and associates

Pakistan Maroc Phosphore S.A 173,443 310,986 241,648 553,559

Foundation Wind Energy - I Limited 509,398 261,702 511,094 195,614

Foundation Wind Energy - II Limited 481,166 261,559 487,445 198,009

Fauji Cement Company Limited 4,553 8,046 3,581 29,655

Askari Bank Limited 669,954 278,914 1,644,030 850,540

1,838,514 1,121,207 2,887,798 1,827,377

Profit on bank balances & term deposits 110,356 290,016 449,177 616,979

Gain / Dividend from mutual funds - 807 380 130,921

Scrap sale and other receipts 91,326 74,043 206,017 179,018

Gain on disposal of property, plant and equipment 74,960 28,685 72,832 49,158

Miscellaneous income 34,857 1,902 65,688 8,735

311,499 395,453 794,094 984,811

2,150,013 1,516,660 3,681,892 2,812,188

17 TAXATION - NET

Current tax 754,795 640,013 1,354,810 1,215,783

Deferred tax (31,547) 1,255,728 (49,588) 495,468

723,248 1,895,741 1,305,222 1,711,251


36


2020 2019

(Rupees '000)

18 CASH GENERATED FROM / (USED IN) OPERATIONS

Profit / (loss) before taxation 1,329,635 (3,423,309)

Adjustment for non-cash charges and other items:

Provision for gratuity 66,788 82,192

Exchange losses 190,957 577,023

Provision for compensated absences 63,577 92,323

Provision for Workers' Welfare Fund 4,060 -

Provision for Workers' Profit Participation Fund 161,455 149,029

Provision for debtors - 119,198

Provision for sales tax refundable 604,684 -

Amortization of transaction cost of long-term finance 32,292 31,669

Depreciation 2,020,791 2,499,492

Amortization 17,027 -

Loss on sale of investment 11,971 -

Loss on classification of investment 35,128 -

Provision for slow moving stores 56,000 -

Provision for stock-in-trade 25,751 -

Finance cost 6,750,578 6,847,352

Profit on bank balances and term deposits (449,177) (616,979)

Cash bonus / income on mutual funds (380) (130,921)

Profit from joint venture and associates - net (2,887,798) (1,827,377)

Gain on disposal of property, plant and equipment (72,832) (49,158)

Operating profit before working capital changes 7,960,507 4,350,534

Changes in working capital:

Stores and spares 165,940 (258,142)

Stock-in-trade 1,439,405 (11,308,991)

Trade debts 2,415,696 (1,522,891)

Advances 22,516 211,535

Trade deposits and short-term prepayments (44,109) (235,621)

Other receivables (1,785,946) (1,423,174)

Sales tax receivable 296,820 (3,071,795)


6,863,212 (12,554,488)

Cash generated from / (used in) operations 14,823,719 (8,203,954)



37

19 RELATED PARTY TRANSACTIONS

Fauji Fertilizer Company Limited (FFCL) has 49.88% share holding in FFBL (2019: 49.88%), while Fauji Foundation (FF) holds 18.29% shares (2019: 18.29%) in the Holding Company. The Group has related parties which comprise of a joint venture, entities under common directorship, directors, key management personnel and employees’ funds. Transactions with related parties and the balances outstanding at the period end are given below. The carrying value of investment in joint venture and associates are disclosed in note 10 to the condensed interim consolidated financial statements.


2020 2019

(Rupees '000)

Transactions with Fauji Foundation (FF):

Dividend paid 665,531 707,561

Contribution paid to Youm-e-Shohada and Defence Day - 6,000

Services provided 119 3,738

Services received 309 -

Transactions with associated undertakings due to common directorship:

Fauji Fertilizer Company Limited

Services and material acquired 1,095,860 843,332

Services and material provided 1,022 1,605

Receipts under consignment account 52,290,398 41,800,136

Commission charged 19,096 15,627


Askari Bank Limited

Balances at bank 1,414,793 337,116 *

Profit on bank balances 148,130 123,010

Long-term loans 416,667 500,000 *

Mark-up on long-term loans 46,917 40,361

Finance cost charged 76,672 60,473

Mark-up payable on long-term loans 267 18,740 *

Utilities expenses paid - 1,210




Foundation Wind Energy - I Limited & Foundation Wind Energy - II Limited


Transactions with joint venture:

Purchase of raw materials 23,592,490 29,789,585

Expenses incurred on behalf of joint venture 3,647 17,801

Balance payable 9,349,057 6,593,346 *




38


2020 2019

(Rupees '000)

Other related parties:

Contribution to Provident Fund 90,547 87,954

Payment to WWF & WPPF 25,047 139,502

Payment to Gratuity Fund 55,189 94,329

Remuneration of key management personnel 234,285 293,352

Meeting fee to directors 13,855 13,727

Noon Sugar Mills 36,116 -

Balance payable to WWF and WPPF 727,568 587,100 *

Payable to Provident Fund 4,652 9,560 *

Payable to Gratuity Fund 349,831 338,282 *

Fauji Security Services (Private) Limited 1,532 2,345 *

Fauji Cereals for purchase of goods 2,268 -

* These balance of accounts, appearing as comparatives, are as at December 31, 2019 (audited).

In addition to above:

Ranking charge amounting to US$ 91,456,667 and Rs. 4,000 million (2019: US$ 91,456,667 and Rs. 4,000 million) has been registered on assets of FFBL in respect of project financing arranged by Foundation Wind Energy-I Limited (FWEL-I).

Ranking charge amounting to US$ 89,146,667 and Rs. 4,000 million (2019: US$ 89,146,667 and Rs. 4,000 million) has been registered on assets of FFBL in respect of project financing arranged by Foundation Wind Energy-II Limited (FWEL-II).

20 SEGMENT REPORTING

A business segment is a group of assets and operations engaged in providing products that are subject to risk and returns that are different from those of other business segments.

Fertilizer Food Meat Power Elimination-net

Consolidated

(Rupees' 000)

September 30, 2020

Revenue 49,961,864 5,319,065 389,819 12,486,280 (7,241,845) 60,915,183

(Loss) / Profit after tax (901,450) (2,177,989) (913,221) 3,062,566 954,507 24,413

September 30, 2019

Revenue 43,643,456 4,040,543 1,857,965 12,437,567 (7,599,154) 54,380,377

(Loss) / Profit after tax (2,417,883) (3,100,168) (1,271,818) 2,720,489 (1,065,180) (5,134,560)

September 30, 2020

Assets 89,960,927 11,780,526 7,324,103 35,151,078 (11,402,996) 132,813,638

Liabilities 84,028,416 14,944,099 6,146,273 21,241,223 (5,388,756) 120,971,255

December 31, 2019

Assets 91,166,569 12,099,369 7,901,327 33,408,997 (10,547,360) 134,028,902

Liabilities 84,332,608 15,830,792 5,810,275 19,899,583 (2,573,497) 123,299,761



39

21 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

21.1 Financial risk factors

The group's activities expose it to a variety of financial risk including market risk (currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

There have been no changes in the risk management policies during the period, consequently these condensed interim consolidated financial statements do not include all the financial risk management information and disclosures required in the annual consolidated financial statements.

21.2 Fair Value estimation

The table below analyzes financial instruments carried at fair value by valuation method. The different levels have been defined as follows:

- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)

- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices level 2)

- Inputs for the asset or liability that are not based on observable market data (level 3)

Level 1 Level 2 Level 3

(Rupees' 000)

September 2020 - unaudited

ASSETS


- Short-term investments - - -

December 2019 - audited

ASSETS


- Short-term investments 9,029 - -

22 GENERAL

22.1 Figures have been rounded off to the nearest thousand rupees.

22.2 Corresponding figures have been reclassified / re-arranged, wherever necessary, for the purpose of comparison.

22.3 These condensed interim consolidated financial statements were authorized for issue on October 27, 2020 by the Board of Directors of the Company.


40

NOTES

Fauji Fertilizer Bin Qasim Limited

FFBL Tower, C1/C2, Sector B,Jinnah Boulevard, Phase II, DHA, Islamabad.

Tel: +92 51 8763325Fax: +92 51 8763304-05Web: www.� bl.com

+92

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COMPANY INFORMATION...Brig Aamir Hussain Mirza, SI(M), (Retd) CHIEF FINANCIAL OFFICER Mr. Muhammad...

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